CMC News

Coinbase Files for Trust Charter To Compete With Traditional Banks

Coinbase has applied for a National Trust Company Charter with the U.S. Office of the Comptroller of the Currency, joining several other cryptocurrency firms pursuing federal licensing while maintaining that it has no intention of becoming a bank.

The largest U.S.-based #crypto exchange announced the move Friday as part of its #strategy to bridge the gap between digital assets and the traditional financial system. Clear rules and regulatory trust enable confident innovation while ensuring proper oversight and security, the company stated.

Approval of the #charter would allow Coinbase to expand beyond custody services into payments and related offerings under clearer regulatory guidance. The license enables companies to oversee their own reserves and take custody of assets for institutions without operating as traditional banks.

Luke Youngblood, a former Coinbase employee who led the creation of staking rewards, explained that the charter would enable built-in on-ramp and off-ramp services. This would eliminate the need to rely on partner banks for these functions, streamlining operations for #Coinbase users.

Greg Tusar, Coinbase vice president of institutional product, noted the company is neither the first nor the last crypto firm to seek a federal charter. The move reflects growing industry recognition of the benefits of operating under federal oversight rather than a patchwork of state regulations.

Several other cryptocurrency companies have recently applied for the National Trust Charter. Circle, which issues the $USDC stablecoin, filed on July 1, followed by Ripple Labs days later, with Paxos and BitGo also pursuing the same license.

Ripple Labs CEO Brad Garlinghouse suggested approval would create a new benchmark for trust in the #stablecoin market.